Somany Ceramics – A Good Tiles Company to Invest

Somany Ceramics – A Good Company to Invest

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Will you buy the shares of Somany Ceramics at the current market price of Rs.34?

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Somany Ceramics - Latest Results

(in Cr.)
Sep-11
Jun-11
FY10-11
Revenue
207.66
172.07
714.88
Net Profit
5.75
5.81
23.43
EPS
--
--
--
Cash EPS
2.94
2.93
11.79
OPM %
8.53
10
9.64
NPM %
2.77
3.38
3.28
 
 
 
 
Somany Ceramics - Latest Results

Somany Ceramics - Share Price Movement

 
 
 
Weekly H/L
35
31
Monthly H/L
42
28.6
52 Weeks H/L
71.37
33.3
 
( 10 Nov 10 )
( 2 Feb 11 )
Delivery / Var+ELM %
66.14
30.98
 
 
 
Somany Ceramics - Share Price Movement

Somany Ceramics – A Good Company to Invest

Medieval encaustic tiles at Cleeve Abbey, England
Medieval encaustic tiles at Cleeve Abbey, England | Source
William de Morgan, fantastic ducks on 6-inch tile with lustre highlights, Fulham period
William de Morgan, fantastic ducks on 6-inch tile with lustre highlights, Fulham period | Source
Phoenix on the portal of Nadir Divan-Beghi Madrasah, Bukhara, Uzbekistan
Phoenix on the portal of Nadir Divan-Beghi Madrasah, Bukhara, Uzbekistan | Source
Blue Turkish tiles
Blue Turkish tiles | Source
Somany Ceramics - share price movement
Somany Ceramics - share price movement | Source

Somany Ceramics – A Good Company to Invest


Average results

Somany Ceramics has posted average results for the quarter ended 30.09.11. While the revenue has gone up, net profit more or less remained flat. The shares of Somany Ceramics are being traded in the Indian stock markets at Rs.34.45 now (BSE 01.01.12). The shares are available in both BSE and NSE. The highest and the lowest prices recorded by the shares of Somany Ceramics in the last one year are Rs.71 and Rs.33 respectively. The present market price is close to the lowest price Somany Ceramics recorded in the last one year. The company is engaged in the manufacture of ceramic tiles.

Presence in small citires

In the last three years, the company more than tripled its turnover. It is a good growth rate considering the economic slowdown in the world and in India. The turnover has increased from Rs.300 crore in 2008 to Rs.760 crore in 2011. The ceramic industry is also performing well even in this tough time to post a growth rate of around 15% p.a. The company has increased its distribution network from 900 to 1500 to make its presence even in small cities like Bhatinda, Phagwara, Salem and Madurai among others. Abhishek Somany is the Managing Director of Somany Ceramics. Somany Ceramics is posting a CAGR of 25%.

Acquisition of Vintage Tiles

Somany Ceramics manufactures tiles in all ranges to suit customers’ needs. The company has tiles to cater to the demands of even small houses, temples, pan shops and servants’ quarters. Low cost tiles have brought good benefit for the company. Somany Ceramics has acquired a strategic 26% equity stake in Vintage Tiles P Ltd. Vintage Tiles is a Gujarat-based tiles manufacturing company. It has a manufacturing capacity of 2.75 million square metres per year. It manufactures polished and vitrified tiles. The acquisition of Vintage Tiles has increased the capacity of Somany Ceramics to 22 million square metres of tiles per annum. Its revenue will also increase by around Rs.75 crore per annum.

Expansion of capacity

Somany Ceramics is investing Rs.70 crore to expand its capacity at its Kadi (Mehsana) facility in Gujarat. In addition to Kadi plant, Somany Ceramics has another plant at Kassar in Haryana. Somany Ceramics also outsources low-priced tiles amounting to around 10 million square metres per annum to Morbi-based producers in Gujarat State. Recently Somany Ceramics opened a show room styled as Somany Studio in Dindigul in Tamil Nadu. It exhibits tiles of all segments with eye-catching colours and designs. The company can multiply its turnover if it focuses more on Tamil Nadu.

Invest for medium term

Somany Ceramics paid a dividend of 70 paise on its shares with face value of Rs.2 per share last year. Somany group has its glass manufacturing company Hindustan National Glass & Industries. At the current market price, the shares of Somany Ceramics are worth acquiring for medium term holding for decent gains.

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